Pentagon Faulted for Scrapping Surplus Rather Than Selling It

WASHINGTON – Millions of dollars' worth of gear, including combat boots, helmets, vests and aircraft parts, is being junked by the Pentagon rather than stored or sold as surplus to suppliers who sometimes sell it back to the military.

Of roughly $1.8 billion worth of equipment the Defense Department downgraded to scrap from January through June, at least $330 million worth came from categories of gear the Pentagon most frequently buys back from surplus dealers, according to the National Association of Aircraft & Communication Suppliers. Those include parts for aircraft, weapons and communications systems, the group said.

The association, a lobbying group for surplus dealers, is worried the military's recent decision to shred retired F-14 "Tomcat" fighter jets is the start of a broader effort to destroy Pentagon leftovers that surplus dealers once bought routinely. Iran is aggressively seeking F-14 components for its own aging Tomcat fleet.

In a new lobbying campaign, association members and other surplus buyers are urging Congress to force the Pentagon to do a better job separating sensitive surplus from items considered safe to sell, rather than lumping both types of surplus together and destroying them.

The association's allegations of Pentagon waste during the war is hitting a nerve with some lawmakers.

Rep. John Shadegg, R-Ariz., wrote to Lt. Gen. Robert Dail, director of the Defense Logistics Agency, asking whether surplus equipment is being scrapped, including new items such as Camelbak backpack-style hydration packs.

"I have received reports that usable items such as sleeping bags and gloves, and auto parts such as mufflers, are being scrapped because DRMS has stated that it is unable to identify them," Shadegg wrote in the letter, which was obtained by The Associated Press. The DRMS is the Pentagon's Defense Reutilization and Marketing Service.

Shadegg said he also is concerned about the loss of government revenue from surplus sales and about harm to small businesses in the surplus industry.

The DRMS sells military surplus through an Arizona-based contractor, Government Liquidation. In fiscal 2005, the Defense Department earned $57 million from surplus sales.

A spokeswoman for the Defense Logistics Agency, Dawn Dearden, said the military is only destroying surplus it no longer needs. The Pentagon is aware of the surplus dealers' concerns, she said.

The agency has reviewed its rules for handling surplus but hasn't decided whether to make changes, she said.

The trade group said it supports tougher government screening of surplus buyers to help prevent military gear from getting into the wrong hands.

"I believe they're using the F-14 as sort of an umbrella to get everything through under national security, to say it needs to be done," said Ed Wilk, owner of Dixie Air Parts in San Antonio and an association member. "They're destroying boots, binoculars, aircraft parts, engine parts, airframe parts."

"They do not have enough room to keep everything and they don't want to pay the overhead of keeping all this inventory," Wilk said.

The trade group isn't protesting the Pentagon's recent decision to destroy old F-14 jets because it understands the sensitivity over the U.S. relationship with Iran, said Peter Beaulieu, the group's president and vice president of Associated Aircraft Manufacturing and Sales in Fort Lauderdale, Fla.

However, the group said some F-14 parts that also could be used on other U.S. military aircraft and commercial planes should be preserved and sold to surplus dealers.

Beaulieu said surplus dealers sometimes resell scrap aircraft parts back to the military. It can be faster for military bases to repurchase parts on the surplus market than to get them from within the military or new from manufacturers, he said.

From November 2003 to May 2004, the Pentagon awarded nearly 400 urgent contracts to the trade association's members for replacement parts for aircraft flying in Iraq and Afghanistan, including fighter jets, combat helicopters and transport planes, the group said.

"We're their ultimate warehousing source," Beaulieu said.

Items the Pentagon downgrades to scrap are demolished by the military, or if sold as surplus, only to buyers who promise to destroy them. The surplus association doesn't know how many downgraded items are useful. But it said it commonly finds useful and even new gear among surplus designated as scrap.

The $1.8 billion in equipment the Pentagon scrapped during the first six months of 2007 represents the amount the Pentagon originally paid for the items. The resale value can amount to pennies on the dollar but still would be worth millions of dollars.

Errors in the Pentagon's surplus sorting and recordkeeping have drawn criticism for years from Congress.

The Pentagon decided to destroy its retired F-14s after The Associated Press reported in January that weaknesses in surplus sale security had allowed middlemen for Iran, China and other countries to acquire sensitive U.S. military technology including parts for Tomcats and other aircraft and missile components. Iran is the only country trying to maintain Tomcats.

U.S. efforts to track down illegal brokers of F-14 parts continue. On Thursday, Jilani Humayun of Lynbrook, N.Y., was arrested by federal agents on charges that between January 2004 and May 2006, he illegally exported F-14 and F-5 jet parts and Chinook helicopter parts to Malaysia, a common pass-through point for contraband military goods.

Prosecutors wouldn't say whether any of the parts came from Pentagon surplus sales, though the complaint suggests at least some did, quoting one of Humayun's suppliers as telling him parts were military surplus and subject to export controls.